In the financial year 06-07, the Midcap Index moved marginally and the Sensex moved up only 15.89 per cent from 1,1280 (31.3.06) to 13072 (30.3.07).

And only the right selection of equity funds has rewarded the investors.

Only five diversified funds gave returns of over 20 per cent last year. 34 other funds could manage double-digit returns between 10-20 per cent, while 67 funds could manage mere single digit returns. And sadly, 29 funds gave negative returns.

In the future, the funds that would outperform are expected to deliver 20-25 per cent pa returns over the next three years and majority of the funds would deliver 10-20 per cent returns.

Let's not talk about the funds that would perform badly, which I am sure, would be many.

It's time to question all those experts and financial powerhouses who gave bearish statements in March 2007 when the Sensex was quoting below 13, 000.

They said that there is a high probability that the Sensex will dip below 10, 000. Lot of newspapers reported expectations of not-so-good fourth quarter results.

This news may have stopped some investors from investing in equity funds and to adopt a wait-and-watch strategy.

The result: loss of opportunity.

Q4 results are good enough and FIIs made a killing by investing net inflows of over Rs  5,500 crore last month at low levels.

So, this brings us to two very critical aspects with regards to your financial advisor. He or she must ensure that:

1. You enter and exit the market at reasonably low and high levels (time the market to some extent if possible).
2. He or she offers you a portfolio/recommendations for future winners.

If your advisor has been successful in delivering results on both these fronts in the past, you need to thank God for that.

If not, change your advisor; he is no good for the next phase of the market.

The author, Jaydeep Kashikar, is Director, BrainPoint Investment Centre. You can visit him at www.brainpointinv.com.